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A year ago, in his address to the National Defense University in Washington, Minister of Defense General Chi observed that as we are "about to cross the threshold into a new millennium, bringing what we accomplished in the past into the future." He also observed that as we approach this threshold, we see a world that is "caught in profound and complex changes."

As fortune would have it, the itinerary for my current trip has brought me into a whirlwind of change more profound and complex than perhaps General Chi envisioned a year ago. And as I have met with leaders grappling with this hurricane that emerged so unexpectedly, I have sought to assure them that the American commitment to the region demonstrated in the past will continue now and into the future, serving as an anchor of stability amidst the storm.

East Asia's tremendous economic development has depended upon a number of factors, including the discipline and hard work of the peoples of Asia. But one critical factor has been vast investments in productive capacity and supporting infrastructure, with a large portion of those investments pouring across international borders. And as the events of recent weeks have demonstrated, just as nature abhors a vacuum, investors abhor instability. Like a school of fish, investors will gather in warm, calm waters but then disperse in a flash at the first hint of danger.

For half a century, America's military presence and engagement has been the basis for stability in East Asia and has ensured that the Pacific Rim is lapped by warm, calm waters in which investors want to swim. And no nation has benefited more than China from the stabilizing effect of American military engagement in Asia. My first effort as Secretary of Defense was to direct a comprehensive review of American defense strategy and military posture. That review reaffirmed America's strategic commitment to remain forward-deployed in the region. The review also made hard budgetary choices to ensure that we would have the resources to fulfill that commitment. And it gave greater impetus to the transformation of our military forces through the introduction of new technologies, new operational concepts and new organizational structures, which together will make our forces more capable even as they are more efficient.

The first pillar of our security strategy in the region is the network of alliances with Japan, Korea, Australia, Thailand and the Philippines. These and our other bilateral relationships in the region were forged in the Cold War. But today they are not reactive, they are pro-active. Standing not against anyone, but standing for shared objectives, not least of which is the stability that undergirds the region's peace and prosperity. We have worked hard to update these bilateral relationships to meet the requirements of a new era. Because they will be better able to promote stability as the region experiences turbulent change, these updated alliances benefit all countries of the region. The US-Japan security alliance, for example, will be as important to Asia's future as it has been to its past. The stability it has created has propelled an economic tide that lifted millions of people throughout Asia. In September, the U.S. and Japan completed revisions to the Guidelines for US-Japan Defense Cooperation to ensure that we are prepared for today's challenges – from peacekeeping and humanitarian relief to responding to regional crises that affect Japan's security, such as on the Korean peninsula. The Guidelines also enhance predictability and confidence in the region by increasing the extent to which Japanese and American security structures are integrated. What these Guidelines do not do is seek to isolate any nation in the region. On the contrary, they are designed to expand stability for the benefit of all nations.

That is why the U.S. and Japan made the process for revising the Guidelines as transparent as possible. We repeatedly engaged China and other countries of the region in discussions about our intent, and we even published a draft of the revisions last June so that governments throughout the region could assess what we were doing and offer their perspectives. This open, transparent process underscores that the revised Guidelines jeopardize no one's interests and, indeed, should serve as a model for how transparency in security matters can promote confidence and reduce misunderstanding.

An important objective of the revised Guidelines is to ensure that the U.S. is fully capable of meeting its security commitments to the Republic of Korea, our other treaty alliance that remains essential to stability and peace in Northeast Asia. We appreciate the contribution China is making toward stability and orderly change on the peninsula. Our cooperative effort in the Four-Party talks has, for the first time, brought together North and South Korea, the United States and China. And our cooperation on the 1994 nuclear Agreed Framework has reduced a grave danger to the region.

Given the complications posed by the ongoing financial crisis, our countries and others in the region will have to enhance our cooperation to ensure the Agreed Framework is implemented. Moreover, we should not limit ourselves to the goal of rendering the Korean peninsula free of nuclear weapons. We should also aim to eliminate chemical and biological weapons from the peninsula, as well.

Looking to the future, I can state that the U.S.-Korean alliance will continue to promote peace and stability in Northeast Asia and the Asia-Pacific region as a whole, even after the immediate threat to stability has receded on the peninsula. I would also note that the United States places great importance not only on America's bilateral alliances, but also on bilateral relationships between countries in East Asia. American interests and the interests of entire region are best served if China also has good relations with Japan, Korea and Russia, and if those countries have good relations with each other.

Another pillar in our regional strategy is the set of overlapping multilateral frameworks for discussion and cooperation. The United States and China are together engaged in a several multilateral channels such as the ASEAN Regional Forum; an unofficial trilateral dialogue among the US, China and Japan; military conferences on practical security cooperation, and; the Four-Party Talks on the Korean Peninsula. While we are working together constructively in these multilateral fora, the United States views a broad and deep engagement directly between our two countries as an essential pillar of our regional strategy.

We seek a steady and sustained engagement that can help prevent the "zig-zags" in our bilateral relationship that General Chi discussed a year ago in his Washington speech. Today, China is an Asian power, and rightfully so. The United States does not fear this, nor do we view China as an adversary. Rather, the U.S. seeks to encourage China to step forward as a responsible and cooperative great nation. A nation that preserves its unique identity, but is more open on security matters and more respectful of the rule of law. A nation that adheres to international norms, including peaceful resolution of disputes, the control of weapons of mass destruction and freedom of the seas. And a nation that joins us in rejecting a zero-sum attitude toward security by recognizing the common interests we all share in a stable environment that ensures security and promotes prosperity.

As General Chi observed in his National Defense University speech, just as economic growth and stability in China contribute to a prosperous and stable Asia Pacific, so too does regional stability create a favorable environment for China's economic development. In this regard, it is important to note that Chinese economic development is dependent on not only stability in the Asia Pacific, but also in the Arabian Gulf –the source of a significant share of energy imports by China and neighboring countries whose economies are interwoven with China's. Any disruption of the flow of oil from the Gulf would clearly have a damaging effect on China's economy. And should that disruption occur through the use of weapon technology provided by China, it clearly would also have a damaging political effect on China's relations with many countries around the world, including the United States.

Among the most important agreements reached by Presidents Jiang and Clinton during their summit in October concerned Chinese assurances regarding exports of cruise missiles and nuclear technology. Given China's stake in Gulf stability, it is already in China's own self-interest to fully implement those assurances in order to ensure that stability in the Gulf and Southwest Asia is not imperiled. Through these assurances and other agreements, the October summit between Presidents Clinton and Jiang gave great hope that our two nations can work together in a variety of ways toward our common goals of stability, security and prosperity.

Our two nations have already taken several steps to increase mutual confidence and decrease miscalculation. Since General Chi's visit to Washington just over a year ago, we have had an unprecedented number of exchanges of senior level officials and officers. And the exchange program that is being worked for the coming year would expand upon this even further, bringing senior defense policy officials together, senior military officials together, and operational military officers together, as well. We have also conducted reciprocal ship visits, including the first Chinese ship visit to the continental United States, and have agreed upon procedures to enable U.S. Navy ships to continue to call in Hong Kong ports. Last month in Washington we initiated a strategic dialogue between policy officials of our respective ministries, during which we agreed to share information on humanitarian exercises. And earlier today, we signed a Military Maritime Consultative Agreement that will help avoid incidents at sea and create a venue for dialogue between Chinese and American operational naval officers.

Such efforts give us hope that the defense establishments of our two countries can work together to our mutual benefit and the benefit of the entire region. If we are to deepen the efforts we have already undertaken and thereby achieve the full potential of those efforts, it is essential that we make them more routine and be willing to be more open to each other.

We all were taught that dealing with an adversary requires secrecy and surprise. But our experience has taught us that dealing with a partner requires openness and confidence. It may seem strange to some that the United States is so open about our strategy, policies, doctrine, capabilities and facilities – including the Pentagon, itself. In fact, last month we set a new record for the number of annual visitors to the Pentagon, and the individual who broke the previous record was a young man from Sichuan who works in China's San Francisco consulate.

Why are we so open? Because we have found that it serves our own interests. Allowing others to see our peaceful intentions and our military capability helps to avoid misunderstanding and miscalculation resulting from either unfounded fear or misinformed folly.

This morning, I had the opportunity to visit your Air Defense Command Center outside of Beijing, making me, I am told, the first Westerner to see this facility. I appreciate this opportunity and urge that such openness become more common so that our exchanges can be as substantive and productive as possible.

In addition to deepening our current joint efforts, it would be mutually beneficial to modestly broaden these efforts to include selected new areas of dialogue and exchange. Possibilities include exchanges among specialists in defense environmental matters, officials from our nuclear rocket forces, and officials responsible for POW-MIA affairs.

We should also seek to advance our efforts, moving from activities intended to build confidence to activities that involve cooperation in "real world" activities. The dialogue we are beginning on humanitarian exercises could lead over time, through a step-by-step process, to an ability to operate together in humanitarian operations. This month's massive ice storm in Canada and the northern United States that required military forces to conduct relief operations, as well as the recent earthquake in Hebei province, demonstrate the potential value of military cooperation in relieving human suffering in the face of natural disasters.

This threefold approach to engagement – deepening our current joint efforts, modestly broadening them into new areas, and advancing from confidence building to real-world cooperation – offers a way to build upon the significant accomplishments of the past year in a manner that serves our mutual interests.

It will also serve the interests of the Asia Pacific, as a whole. In each capital I have visited on my current trip – Kuala Lumpur, Jakarta, Singapore and Bangkok – and in previous meetings with senior officials from the region, I have been asked about the status of U.S.-Chinese military relations. There is a clear realization that ensuring regional security and stability will be much easier if the United States and China have cooperative and constructive relations. There is an African proverb that, when the elephants fight, the grass gets trampled. Our friends elsewhere in the region are keenly interested in encouraging good relations between us so they will not be trampled, and we have the responsibility to do all we can develop that cooperative and constructive relationship.

A century ago, as the world stood on the edge of a new era, the American Secretary of State John Hays said, "The Mediterranean is the ocean of the past, the Atlantic is the ocean of the present, but the Pacific is the ocean of the future." Today his prediction stands vindicated, notwithstanding the very real economic troubles that have suddenly afflicted the region. The question for us is what kind of Pacific do we wish to build.

Our two countries have a fundamental choice. We can work together toward our common interest, or we can work against each other. The United States will succeed on either path. But it is the first path – the path of openness, cooperation, and respectful dialogue over differences – that promises the greatest advances for the security and prosperity of our two countries and the entire region.

The United States firmly believes that the security of both our countries can be enhanced by working together and that what is beneficial to one need not be detrimental to the other. Security is not a zero-sum game.

Together and in partnership with the other countries of the region, we can ensure that the Asia Pacific is a region known not for its problems and perils, but for its peace, promise and prosperity.